De Facto versus De Jure Bank–Insurance Ventures in the Greek Market

Abstract

The present study delves into the bank-insurance phenomenon in Greece. The paper explores the market-based practices surfacing through the bank-insurance interface and delineates the possible theoretical corporate structures. A review of the various financial ventures in the domestic market is provided aiming to unveil corporate patterns both in a cross-venture and time series framework. As a result of this survey, the existence of de jure limits versus de facto boundaries, as expanded by loopholes and avoidance activities, is established. The ''traditional'' subsidiary model is complemented by a number of multiventures as banks make inroads into the insurance business. The latter is associated with the presence of multinational firms and foreign direct investment in the region. The analysis is further extended by examining the drivers, motives and operational issues pertinent to these financial conglomerates.

Does the Stock Market Compensate Banks for Diversifying into the Insurance Business?

“…Innovation in technology, increased customer sophistication, regulatory changes, market globalization and reduced multinational trade barriers are a few of the factors underpinning the major shake-up (Staikouras, 2006b;Goddard, Molyneux, Wilson & Tavakoli, 2007). Some studies have concentrated on the risk-return profile of bank-insurance conglomerates (Brown, Genetay & Molyneux, 1996;Genetay & Molyneux, 1998;Lown, Osler, Strahan & Sufi, 2000;Deng & Elyasiani, 2008;Nurullah & Staikouras, 2008) generally showing evidence of risk diversification benefits; others have focused on efficiency advantages gained via the 'new' corporate structure (Vander Vennet, 1996; some have presented institutional analysis (Molyneux, Altunbas & Gardener, 1997; Van den Berghe & Verweire, 2001;Staikouras, 2006b;Kalotychou & Staikouras, 2007) 1 ; while the final strand has examined the wealth effects of bank-insurance deals (Fields, Fraser & Kolari, 2007a,b;Staikouras, 2009) with some illustrating a positive response by banks, insurers and brokerage firms to specific announcements, and/or removal of certain regulatory constraints (Johnston & Madura, 2000;Carow, 2001a,b;Carow & Kane, 2002;Carow & Heron, 2002;Cowan, Howell & Power, 2002). Although links between banks and insurance firms can be traced back to the 19 th century (Molyneux, Altunbas & Gardener, 1997) it was not until banks focused on growing non-interest income as a main strategic objective from the mid-1980's.…”

Management Closeness Factor Impact on Bancassurance Development in Latvia

“…In Operational factor zones -"branch environment, customer relations, range of services, financial management and brand awareness". Later on, Kalotychou and Staikouras (2007) propose Bancassurance success determinants -company operational issues like scope of products, fees and the level of technology development.…”

A practical approach to blend insurance in the banking network

“…A number of authors have documented the roots of the trend, its expansion at certain parts of the world, as well as the challenges that lie ahead for the implementation of such corporate restructuring (Morgan et al (1994), Molyneux et al (1997), Benoist (2002), Dorval (2002), Falautano and Marsiglia (2003)). Others have focused on new markets such as Greece, where the phenomenon had been in effect in a de facto mode (Kalotychou and Staikouras, 2007) for a long time; while elsewhere evidence is provided that there are significant cross‐selling opportunities that mostly arise from consumer unawareness regarding insurance offerings by banks and their willingness to buy these new products (Lymberopoulos et al , 2004).…”